Kent Renewable Energy Project (KREP)
Euroforest limited are pleased to announce an exclusive supply contract for the 28MW Kent Renewable Energy Project based at Discovery Park, Sandwich, Kent. The plant will require some 240k tonnes of Wood Raw Material per annum much of which will be sourced from the under managed broad leaved woodlands of Southern England. The plant is set to begin production in 2018 producing electricity for the equivalent of 50k homes and reducing carbon emissions by some 100k tonnes per annum.
Please see the official press release below for all the details.
The last few months of 2015 saw domestic sawlog demand at low levels primarily as a result of exchange rates f
avouring imported sawn timber. This effect was felt the most by the big carcassing mills in the north of the country whereas the predominantly fencing based mills further south were cushioned, to some extent at least, from the worst of the pressure. This resulted in low log prices over much of the country which continued into early 2016. Strengthening of the pound, combined with the usual Spring increase in building activity has produced better sawlog demand during the first half of this year with co-products supplies being as high as anyone can remember as a direct result of sawmills operating flat out as well as adding extra shifts in many cases. The result has been steadily rising log prices at the forest gate and logs moving to customers as quickly as they can be produced. Whilst we are not yet back up to the price levels of a couple of years ago, and sawmillers are reporting that they are well bought over the Summer and early Autumn, many are keen to secure volume now to take them through the latter part of this year and into next.
In the small roundwood sector the picture is not quite so rosy. The high level of sawmill co-products has meant that in plants where this is an option, round timber has been replaced by chips and sawdust, leading to reduced demand and price. There have also been a number of outages, both planned and unplanned, up and down the country, which has further reduced demand and price. However, with an increasing reliance on the biomass sector underwriting small roundwood prices, as we enter Autumn and into Winter demand can be expected to rise along with price.
And then there is the effect of Brexit. It is too early to say for sure which way this will take us in the forestry market. On the one hand the early casualties of the stock market have been the housebuilders, as reduced confidence is reflected in an anticipated fall in new house builds and reduced demand for all grades of timber. On the other hand the falling pound makes export of our forest products more attractive and may make up for any reduction in volume in the domestic market. A very real worry, and something that has been mentioned in this column in the past, is the skills shortage we face in our industry. As more and more of the forest machine operators at one end, and planters at the other, are sourced from outside the UK, we must remain aware of the effect of any limitations on the free movement of people on our industry. What is for sure is that we are entering a brave new world in so many ways, and that there will be as many opportunities as there are threats, and we should take advantage of whatever opportunities present themselves to strengthen our industry over the coming months and years.
Operations Director - North Scotland